5 minutes
One of the most rewarding things in my work with credit unions is the opportunity to have informal conversations with board leaders. Often these conversations occur in hallways during breaks in planning sessions, over lunch before or after a conference speech, or during one-on-one interviews I conduct as part of my strategic planning process. I relish these conversations for a number of reasons.
For one thing, they are usually private (or at least semi private) and focus on issues that really matter to the person speaking with me. That provides a level of candor, honesty, and depth that can be hard to come by during group discussions.
But the most important thing these encounters provide is a chance for me to gain insight into what’s working and what’s not (and to test out potential solutions) for actual credit union boards.
Perhaps it’s not surprising that most of these conversations focus on how to improve board effectiveness. The core problem boils down to this: The board is not functioning as a winning team.
Here are five primary reasons this happens and recommended actions you can take to help build a winning board team at your credit union:
1. All-Star Player Syndrome
On many boards an individual (or small group) is regularly deferred to in discussions and decision-making. It occurs for any of a number of reasons, including tenure, background, position, or ability/willingness to communicate. When it becomes the norm, it leads other board members to opt out and disengage because they feel their input will be devalued (or ignored).
Action step: Conduct a candid and thorough assessment of the board, facilitated by an independent outsider who focuses on surfacing a shared understanding of the talents each board member brings to the table. Find a way to leverage the strengths of each director in support of the team so there is less reliance on the all-stars.
2. Gaps in Knowledge, Skill, or Experience
As the complexity of CUs has increased, the level of knowledge, skill, and experience needed by board members has changed dramatically. When boards lack capacity in areas critical to the strategic decisions they need to make, they struggle to make sound decisions (or any decision at all).
Action Step: Focus recruiting efforts on building a team that includes people with knowledge, skill, and experience in critical areas. Seek people who can contribute more because of what they know and have done that can be applied to the credit union, not just people who are willing to serve.
3. Wrong Seat or Wrong Bus
Even with the best intentions, mistakes can be made in recruiting board members and aligning members with board initiatives. Sometimes directors are asked to serve in a capacity for which they are ill-equipped (wrong seat), and sometimes the wrong people are brought onto the board (wrong bus); in either case, action needs to be taken quickly to fix the problem.
Action Step: In the spirit of “be slow to hire and fast to fire,” exercise care in assigning responsibilities to current board members and in recruiting new directors. Be specific about the requirements to serve on the board and in various roles within the board. Evaluate current and prospective board members against those requirements before making commitments, and invest in training to overcome gaps instead of assuming learning will be gained through experience.
4. Politics, Posturing, and Power
Though we might not like to admit it, every group has its own set of dynamics that are to some degree about politics, posturing, and power. Credit union boards are no different. When these issues get in the way, the impacts are serious and always detrimental.
Action Step: Establish clear behavioral expectations for the board that mitigate the potential impacts of politics, posturing, and position. Be candid and honest about the past, present, and future work of the board to put these issues in the rearview mirror and move ahead as a team.
5. Lack of Shared Commitment
People agree to serve on credit union boards for a number of reasons. When directors come on board, they may not fully understand the purpose and role of the board on which they have agreed to serve. When shared understanding of the board’s charge is lacking, boards can flounder and avoid the difficult but necessary work that needs to be done to ensure the credit union’s future success.
Action Step: Update all the relevant documents regarding the board’s role. Be sure that the idea of the board having a shared commitment is delineated so everyone understands the purpose and role of the board. Make sure the notion of the board functioning as a team is defined as a clear and specific expectation.
The Bottom Line
The most effective boards work together in much the same way as winning sports teams do—they play to their strengths; they respect their differences; they commit to a shared vision; and they share ownership of the outcomes they produce. I encourage you to try out the five-step plan above by putting in place each action step in the near term. Doing so will help you create a winning board team that can lead your credit union to success.
Michael Hudson, Ph.D., founder and principal of Credit Union Strategy, is a speaker, facilitator, consultant and executive coach. He has been a credit union member since he was three months old. Hudson helps individual credit unions discover and implement strategy, build and sustain culture, and identify and develop leaders.
